(520) 750-1061

Miller Trusts | Income Only Trust

Purpose of a Miller Trust | Income Only Trust

A Miller Trust solves a single problem. The problem is that
the person applying for ALTCS (Medicaid) has too much income. A Miller Trust is
not useful for any other purpose.

Income Criteria

In Arizona, in 2014, the maximum income that a single person
can have and still qualify for the ALTCS program is $2,163.00 per month.

If the single person has more than $2,163 income, but
less than $6,648.77 per month (in Pima and Maricopa County, $5,595.31 in other
Arizona Counties), the single person can do a Miller Trust. (The maximum number
listed above represents the average monthly cost of care in a nursing facility
as calculated by ALTCS. The stated maximums are current through September
30, 2014.)

If a patient is married but has checks coming in his name
amounting to more than $2,163.00, the ALTCS eligibility worker will average the
income of both spouses to see if the patient can pass the income test of
$2,163,00.

If the married patient has more than $2,163.00 income,
according to the averaging technique described above, but less than $6,648.77 per month (in Pima and Maricopa County,
$5,595.31
in other Arizona Counties), the single person can do a Miller Trust.

Directing Income into the Miller Trust

The term “Miller Trust” is an informal name. The
official ALTCS name is an Income Only Trust. A more
accurate name for this trust is an “Income Cap Trust”. It has also been called
an “Income Assignment Trust”. This is because, after the trust is created, the
patient assigns his or her right to receive social security and pension to the
trust.

In the eyes of ALTCS, if the Miller Trust is receiving
income, the patient is not receiving that income. This is how the patient solves
the excess income problem. ALTCS no longer requires that the patient attempt to
assign all income from all sources into the Miller Trust.

Assigning less than all income into the Miller Trust

If the patient is going to be receiving care at home, and
not in an institution, it is recommended that the patient assign only so much
income into the trust as will render him or her income eligible. This is because
the patient incurs no share of cost obligation when he receives his care at
home. Those funds then accumulate in the Miller trust which must be paid back to
ALTCS upon the patient's death to reimburse the program for the patient's
accumulated cost of care.

As an example, Mr. Berry receives his care at home. He has
Social Security of $800 per month and a pension check from his union for $900
per month. He should assign only his social security into the trust.

Social Security always cooperates with such requests.
However, some pension payers do not always cooperate with requests to assign
income into a Miller Trust. Fortunately, ALTCS will consider the patient to be
income eligible provided that the total of income received by the patient
outside the Miller Trust does not exceed $2,163.00. In most instances, it is the
Social Security alone that puts the patient over the income cap.

If the patient is receiving care in a nursing home or in an
boarding home, there is no apparent advantage to keeping certain income items
out of the Miller Trust. This is because ALTCS assesses a share of cost which
will prevent substantial funds from accumulating in the Miller Trust.

Who can create a Miller Trust?

What if the patient is too disabled, physically or mentally,
to sign a trust? If the patient has previously made a power of attorney for
finances, the agent under that power of attorney can create the Miller Trust.
ALTCS is liberal in permitting this, even if the power of attorney does not
explicitly authorize the creation of a Miller Trust. If the patient is too
disabled to understand that he or she is creating a trust, and if the patient
has not granted a financial power to another, it will be necessary to obtain
court conservatorship in order to create the Miller Trust.

Establishing the Miller Trust Bank Account

Once the Miller Trust is created and signed by the patient
or the patient’s agent under Power of Attorney, the next step is to create a
bank account in the name of the trust. The tricky part is that the bank account
cannot have an opening balance. Most banks hate this requirement and may not
accommodate you. National Bank of Arizona is exceptionally cooperative in
establishing these trusts.

Once the bank account is opened in the name of the trust,
the next step is to write social security and the pension payers and ask them to
direct deposit future checks into the bank account.

How are the funds in the Miller Trust spent?

If all of the patient’s income flows into the trust, the
trustee may retain a personal needs allowance for the patient. The trustee may
pay the ALTCS approved Minimum Monthly Maintenance Needs Allowance to the
community spouse. The trustee may and must pay the patient’s share of cost (if
the patient is not at home). The trustee may, with ALTCS approval, pay the
administrative fees associated with the trust.

When the patient dies, any money remaining in the Miller
Trust must be remitted to the ALTCS program.

A Miller Trust is not for long range planning

We do not recommend that you do a Miller Trust unless you
intend to apply for ALTCS soon thereafter (60-90 days). A Miller Trust is not a
long range planning tool. A well elderly person should make a power of attorney
that would enable another to execute a Miller Trust on his behalf.

Mr. Bartlett prepares a Miller Trust during a single client
appointment in most cases. The patient typically pays the legal fees, and the
payment is countable towards the patient's spend down. If you need assistance
with a Miller Trust, call Mr. Bartlett at (520) 750-1061.

If you wish to see how you can order a Miller Trust | Income
Only Trust online
at a substantially reduced fee,
Click here.

Miller Trust Timing Issues

You do not want approval of ALTCS eligibility to be slowed by
submission of your Miller Trust. For this reason, we recommend that at the
time you submit your Miller Trust to the eligibility worker, you do two other
things. First, obtain from the eligibility worker a form that notifies
ALTCS what you expect will be the monthly income and expenses for the trust and
fill it out a and submit it immediately. Second, if you are going to
assign the patient's social security into the trust, and the patient cannot
request that assignment himself, you will need to become social security
representative payee through the Social Security Administration. Request
that status without delay.
Here is the form.

You can revoke a Miller Trust | Income Only Trust

You can discontinue the use of a Miller Trust at any time. Some people
find this reassuring because they want to try out ALTCS while keeping other
options open.

If you wish to see how you can order a Miller Trust online
at a substantially reduced fee,
Click here.